EU rewards Balkans' loyalty with 1.3bn

Ian Black

Thursday March 30, 2000

Brussels - Balkan countries stand to get nearly $2bn (£1.3bn) to build or repair roads, bridges, power connections and other infrastructure as Europe rewards them for supporting last year's war in Kosovo.

Pledges at a donor conference in Brussels yesterday are expected to meet initial targets for urgent work - and underline that Serbia will remain in the cold as long as the Yugoslav president, Slobodan Milosevic, is in power.

The EU is making a determined effort to Europeanise the south-east corner of the continent - and answer US criticism that it is not doing enough. Funding was one of the things agreed under a "stability pact" adopted as the Kosovo conflict ended last June; peace, prosperity and stability were supposed to be fostered in the region, in part by integrating Balkan countries into the European mainstream.

"A year on from the [Natoair] strikes in Kosovo, we're starting to make progress," said Chris Patten, the EU's commissioner for external relations. "A ring of democracy is starting to take shape around Serbia."

But, he added: "While Milosevic is still in power the serious money stays in the vault." He described the Serb leader as "a brooding presence, locking Yugoslavia into a bleak winter".

Last week's EU summit in Lisbon mandated Mr Patten and Javier Solana, the union's foreign policy chief, to "get a grip" on a situation characterised by overlapping authority, underperforming agencies and poor delivery of help.

Mr Solana told representatives of 44 countries, mostly European but including the US, Canada, Japan and Korea, as well as 36 international organisations, that it was crucial to ensure that all refugees displaced by the Kosovo conflict returned home.

"Without that we will have a pact but no stability," Mr Solana said. "We are going to do our best. The people who run the European Union are ready to roll up their sleeves."

Pledges came thick and fast despite a rule that speakers address the conference for no more than seven minutes, with delegates joking that poorer countries needed more time to set out their needs.

The EU offered £325m for "quick start" projects. "What matters is whether the road to the next town is actually rebuilt, whether the bridge is being repaired, whether the electricity grid functions and clean water comes out of the tap," Mr Patten said.

Britain's minister for Europe, Keith Vaz, announced a £100m allocation - the Department of International Development's entire Balkan budget for the next three years - illustrating the familiar point that such pledges are often not new money.

In return for aid and investment under the stability pact, Albania, Bosnia, Bulgaria, Croatia, Macedonia and Romania have all committed themselves to democratic and economic reform and creating a stable environment that will attract private investment.

Representatives of Montenegro - considered likely to be Mr Milosevic's next target if it tries to break out of its federation with Serbia - and of the Serbian opposition, are also at the two-day conference.

"The real question for us [as donors] is how we actually spend the money," said James Wolfensohn, president of the World Bank.

More than 400 projects were proposed by the countries of the region to tackle the infrastructure with road- and bridge-building and to help reform economies, banking systems and tax systems. The projects were studied and whittled down to a manageable number.

Thirty-five quick-start projects are expected to cost about £670m. A further £430m will go to projects to help democracy, security and reform.

According to the World Bank, progress is most urgently needed in trade integration, anti-corruption measures and investment in regional infrastructure, to tie the region to the rest of Europe.

"This is just straight, simple, logical fact," Mr Wolfensohn said. "If you don't do it, there is nothing we can do to help."

Original article